Economist Mike Schussler says South Africa’s economic growth rate will not see a “major improvement beyond 2% . . . 2.5% for the foreseeable future”.

“I think growth next year, not even depending on who is the President, will be better than this year, but it is not going to shoot out the lights,” he notes.

“Ultimately, next year is a holding year. I’m not saying we are going into a recession, but we are on a growth strike. We are going to struggle to grow fast enough to create enough jobs, which in itself creates a political problem.”

Schussler believes a change of the political guard within the ruling African National Congress, with the election battle scheduled for the end of this year, will only have an impact on the economy towards the end of next year, or thereafter.

“Economically speaking, it takes a year to 18 months for interest rates to have an impact, for fiscal policies to have an impact. So, what happens in December will have an impact more in 2019 than in 2018.

“If you look at our political history, we could get a bit of a boost should consumer confidence come up because people feel the crooks have lost. If Cyril [Ramaphosa], Zweli [Mkhize] or Lindiwe [Sisulu] wins, there could be a boost. NDZ (Nkosazana Dlamini-Zuma) might not be such a good boost.

“If the wrong person wins – someone aligned with the crooks – consumer and business confidence will not pick up. International investors will care less about us and local investors will invest ever more in other countries. The growth rate will stay subdued.”

Schussler says the direct fixed investment of South Africa at the end of the second quarter this year was over R2.8-trillion.

“Sixty per cent of South Africa’s gross domestic product value is invested in other countries. Most South African companies are now investing outside South Africa.

“Firms no longer think returns in South Africa are worth the risk.”

Schussler adds that South Africa has to be seen “to do the right thing”, should the non-NDZ camp win.

“The right thing means people will have to go to jail for what they have done. Not the bit players and side players. I’m talking political players. This will lead to upheaval.

“But, of course, the crooks have much bigger motivation to stay in power than those trying to unseat them. That remains a problem.”